Insurance markets in everything — celebrity disgrace

Policies can be individually tailored to reflect a company’s confidence in a celebrity. For example, for sponsorship contracts ranging from £1m to £50m, policies can be designed to reimburse the full amount to the sponsoring company in the event of a misdemeanour by the celebrity, or pay out on a sliding scale, depending on the nature of the incident.

Premiums vary, but brokers say they tend to start at 0.25 per cent of the sum insured, or just under 1 per cent, on average, for more bespoke arrangements.

Cover can also be arranged for different types of risk. One of the main types is loss of profit, if customers stop buying certain products in the wake of a celebrity’s disgrace.

And this:

But, as with all insurance, it pays to read the small print and understand the factors that determine the success of a claim. “If someone has a squeaky clean image, the threshold for disgrace is lower than it would be for a hellraiser,” Mr Rackliffe explains.

Here is the David Oakley and Oliver Ralph FT story.


Isn't there an obvious moral hazard in agreeing to pay out rock stars if they sleep with teenbait groupies or get caught with heroin?

How can you insure a female tennis player against getting caught for taking drugs? It is a win-win for her and so will encourage drug taking.

Presumably the sort of people who stand to benefit are young squeaky clean people who don't want their naked photos hacked. But I can't believe this will be an important product.

The payout is to people who hire stars as sponsors, not the stars themselves. The stars would still lose out for misbehaviour if this was part of the contract.

I wonder how "disgrace" will be defined and who will get to define it? Number of posts about x celebrity on TMZ, for example?

Insurance should be with knowledge and experience; it shouldn’t be from other factors. In a business like Forex trading, I believe it is so much crucial that we focus on getting education because that’s how we will get correct results. I am working with a top rated broker like OctaFX and with them, I always feel happy and that’s especially to do with their educational guides which helps me greatly in trading and allows me to work very well with things.

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